Ifill thats all ahead on tonights newshour. Major funding for the pbs newshour has been provided by moving our economy for 160 years. Bnsf, the engine that connects us. And by the bill and Melinda Gates foundation. Dedicated to the idea that all people deserve the chance to live a healthy, productive life. And with the ongoing support of these institutions and foundations. And. This program was made possible by the corporation for public broadcasting. And by contributions to your pbs station from viewers like you. Thank you. Ifill neither side showed signs of budging today as the nation edged closer toward a so called fiscal cliff that could raise taxes by years end. We begin with a report from newshour Congressional Correspondent kwame holman. Were going to have to see the rates on the top two percent go up. Were not going to be able to get a deal without it. Reporter in his first interview since the election, president obama rejected a proposal from House Speaker john boehner. He spoke on bloomberg television. Unfortunately the speakers proposal right now is still out of balance. Im happy to entertain other ideas that the republicans may present. But we are not going to simply cut our way to prosperity or to cut our way out of this deficit problem that we have. Were going to need more revenues. In order to do that, that starts with higher rates for the folks at the top. Reporter the president did say today he would consider lowering rates again for the top two percent next year as part of a broader tax overhaul. The House Republican plan envisions 2. 2 trillion in deficit reductions over the next decade. 800 billion would come from new revenues but with no hike in tax rates for top earners. Instead the plan relies on 1. 2 trillion in reduced spending including 600 billion from changes in medicare and medicaid. At the white house today, the president met with a Bipartisan Group of governors pressing his own plan for deficit reduction. That proposal, 1. 6 trillion in revenue from tax increases on the wealthy and 600 billion in spending cuts mostly from reductions in medicare. He also wants authority to raise the debt ceiling without congressional intervention. But governors emerged afterwards treading a line between the two sides. Delaware governor jack markel, a democrat, is chairman of the National Governors association. We came not to embrace one plan or the other. We came to make it very clear, a, why its so important that something happen both on the economic and on the fiscal issue and, b. , to make sure that the president , the white house, the administration and members of congress realize that we are willing partners. Reporter republican scott walker of wisconsin and other leaders also urged the burden of medicaid spending for the poor not be shifted to the states. We hope theres going to be something that happens here in this nations capital. In the end we hope its something that is positive for our states both for our finances but also for our states economies. Reporter according to the governors the president reiterated his commitment to try to get an agreement with republicans here at the capital. But in a statement Speaker Boehner said the president s plan doesnt have the votes to pass the house. Mr. Boehner said his plan represents a middle ground. Hes ready and eager to talk to the president about it. Congresswoman Kathy Mcmorris rogers of Washington State is the partys conference chair in the house. Were going to either succeed together or were going to fail together. The president is calling for higher taxes as well as more spending. Hes calling for another stimulus. At a time when we need tax reform. We need to be looking at. And the republicans have put forward tax reform that includes closing the loopholes, eliminating some of those tax credits, that will actually impact the wealthiest. Reporter some republicans said the boehner plan goes too far in taxing the welloff. South carolina senator jim demint, a staunch fiscal conservative, blasted the plan on twitter today. He said Speaker Boehners offer of an 800 billion tax hike will destroy jobs and allow politicians in washington to spend even more. But the senates democratic majority leader harry reid warned republicans against listening to such voices. You cant let these negotiations be dictated by the tea party. Our guiding principle should be the views of the vast majority of the American People. The math is clear. The only way to accomplish these things is to allow the rates to go up on the top two percent of tax payers. Were not going to twist ourselves into contortions to apiece a vocal minority of the tea party. Reporter in turn, Senate Minority leader Mitch Mcconnell said president obama needs to ride herd on democrats if theres any hope of agreement. Only one person in the country can deliver the members of his party to support a deal that he makes. And thats the president. There have been no deals of this magnitude made in modern times in congress and forced on a reluctant president. I would hope the president would turn off the campaign. Congratulations you had a great victory. And lets get serious about dealing with this deficit and debt here at the end of the year. Reporter the partisan back and forth was briefly on hold this evening for the lighting of the capital Christmas Tree but there was little else in the days developments to suggest happy holidays. Woodruff still to come on the newshour, natos decision to deploy an antimissile system to turkey; the massive protest against the government in cairo; paul krugman on the stalemate over taxes and spending; the ongoing cholera epidemic in haiti; and American Military leadership. But first, the other news of the day. Heres hari sreenivasan. Sreenivasan iran claimed today it has captured a u. S. Surveillance drone. The scaneagle is used to collect photographic and video images. Iranian state Television Broadcast video of two military commanders examining the aircraft. They said it was seized in the past few days, but they did not specify where or how. In response, the u. S. Navy said none of its Unmanned Aerial Vehicles u. A. V. s are missing. And in washington, white house spokesman jay carney raised doubts about tehrans statements. We have no evidence that the iranian claims you cite are true. Id refer you to the pentagons comments this morning for details about this particular type of u. A. V. , but again we have no evidence that the iranian claims are true. Sreenivasan a year ago, iran did manage to down a c. I. A. Drone that apparently crossed the border from afghanistan. And last month, the u. S. Military said another drone came under fire by iran over the persian gulf. It was undamaged. In afghanistan, a bomb blast has killed two nato troops in the countrys south. The Alliance Says the attack happened yesterday. It did not provide the nationalities of those killed. So far this year at least 384 International Troops have been killed in afghanistan. Most of them have been americans. In economic news, the u. S. Housing market showed more signs of recovery in a new report by the real estate data firm, core logic. It said home prices in october were up more than 6 compared with last year. Thats the largest gain in more than six years. Still, the housing news was not enough to boost wall streets spirits. Stocks edged lower again as budget talks in washington showed no signs of progress. The Dow Jones Industrial average lost more than 13 points to close at 12,951. The nasdaq fell five points to close at 2996. Those are some of the days major stories. Now, back to judy. Woodruff we turn now to the conflict in syria. The countrys neighbor, turkey, received longsoughtafter defense help from nato today. The military coalition also expressed growing concerns about the assad regimes chemical weapons supply. In an all too familiar scenes of civil war, rockets blasted and fires flared overseer i cant today. Far from the fighting in brussels, nato members approved turkeys request for patriot antimissile systems. They will defend against syrian shelling and rocket fire that land on the turkish side. The issue has taken on greater urgency. Amid u. S. Warnings that syria could be preparing to use chemical weapons against the rebels. The syrian stock piles of chemical weapons are a matter of great concerns. We know that syria possesses. We know they have the chemical weapons. It is a matter of urgency to ensure effective defense and protection of our ally turkey. Woodruff nato chief also warned of Even Stronger action if the Syrian Government crosses the chemical line. Echoing mondays statements by president obama. If anybody resorts to these terrible weapons, i would expect an Immediate Reaction from the international community. Woodruff syria has denied any intention of using chemical weapons. Russia, a key syrian ally, dismissed the intelligence reports as rumors. Yesterday in istanbul, russian president Vladimir Putin said he understands turkeys concerns about border security, but he warned that deploying patriot missiles could raise fears of a wider conflict. Meanwhile, inside syria intense fighting flared again near damascus today. Amateur video showed government warplanes carrying out new arrayeds. The syrian capital has seen escalating violence in the last week as rebels try to close the noose on president Bashar Al Assads regime and the military tries to recapture lost ground. Amid the fighting, the state news agency reported that rebel more tar fire killed nine students and a teacher at a school outside damascus today. The opposition also reported the incident but did not say who fired the mortar. Meanwhile, there are meanwhile, there are indications that russias position on syria may be changing. The New York Times reports that the russians had agreed to a new strategy to persuade president assad to step down. For more on all of this, we turn to dimitri simes, president of the center for the national interest, a Foreign Policy think tank. And steven heydemann, a Senior Adviser for middle east initiatives at the United States institute of peace. Hes worked with the Syrian Opposition on the challenges ahead once the assad regime falls. Steve, to you first. What do you understand the situation on the ground to be right now in syria . We have seen in the past month a significant shift in the momentum of events on the ground. We have seen the opposition increase the effectiveness of its tactics. It has acquired weapons that have permitted it to challenge the regime much more effectively across a broad range of fronts ranging from the south of syria to damascus to the north, and were seeing this reflected in the regimes response to the opposition including some of the activities surrounding movement of chemical weapons. We dont know exactly whats at stake but part of the speculation is that theyre putting themselves into a position in which they could create a defensive zone if it turns out to theyre unable to defend damascus in the long run. Woodruff what is known about the evidence that this is a serious threat that they may turn to chemical weapons . The intentions of the regime are uncertain. I dont think anybody knows what Bashar Al Assad has in mind but there is a very detailed satellite imagery available that provides very clear evidence that a number of sites in which these weapons have been stored from been. Have had activity that is seen as very troubling by western military analysts because it suggests that they may be positioning themselves for some possible use of those weapons at some point in the future. Woodruff youre saying this is taking place at a time when the opposition seems to be gaining the upper hand. And when the regime i think is feeling increasingly insecure about its survival. Thats a very dangerous combination. Woodruff dmitri simes youve been talking to people close to russian president Vladimir Putin. They would agree with what steve said. The situation on the ground is changing. The assad regime is losing. Theyre not yet at a point of collapse. But its next to impossible to imagine how assad can win. Nobody knows for sure whether assad will be able to stay away for months or weeks because if a regime like that collapses, it may happen very quickly. What the russians do not want to do is to be on the side of a tyrant and to be excluded from a future peaceful settlement. Woodruff this is a new posture on the part of the russians. Is that fair to say . It is not entirely new. I think the russians were dealing to deal with syria for quite some time. I think that they were willing to have assad be in agreement with power as a part of the negotiated settlement for quite some time. What is changing is the pryings they would require, is the price the russian price . The situation on the ground is changing in the rebels favor. Woodruff what does that mean . Well, it means that, for instance, they were saying in the past that they would not be prepared to prejudge who would stay in power in syria once negotiations would start. A senior russian official close to president putin told me recently we consider assad a butcher. He has to go. But it should be decided by the syrian people. Woodruff so if that, Steve Heydemann is the evolving russian position, is the United States prepared to accept that, to deal with that . Well, the changing conditions on the grown have given considerable new urgency to conversations about whether a political solution is possible, whether there is a strategy that would bring about the removal of Bashar Al Assad from power, on what terms and what role the russians can play in that process. One of the Big Questions in washington right now is whether russia could deliver Bashar Al Assad even if they were to accept a process of negotiation that envisioned his removal from power. Woodruff what do you mean deliver him . Because it isnt entirely clear that russia has the kind of flu over assad that would persuade or compel him to accept a negotiation approved by the russians and endorsed by the russians. Woodruff before you go any further, let me turn back to dmitri simes. Whats your sense of how much influence the russians have . I completely agree with steve. The russian influence on assad is real but limited. There is another country which has more influence on assad and it is iran. The real dilemma for the russians would be if we say, okay, lets have this negotiation. Lets have russia disabled but iran should be excluded. Assad says, well, i am willing to be a part of the negotiations but not without iran. To accept the exclusion of iran would be a difficult concession for putin. My impression is that it is not quite there yet. Woodruff given that, again Steve Heydemann, how is the west looking at all this . Its happening very quickly. Its a matter of enormous concern. If the regime were to collapse in the absence of a political settlement, the potential for increased violence, the possibility that the opposition now is taking shape entirely is not yet ready to govern is seen as a very serious consideration in washington. However, the question of whether it would be possible for the u. S. , for example, to accept a negotiated process in which assad himself were permitted to escape accountability is something that i think would be very hard to sell. Its a divide between the u. S. And certainly with the iranians that will hamper efforts to put a political process in place. Woodruff at this point, what are the next steps that are happening at this point with the administration, with nato . We saw president putin in turkey. So what are the next steps . My own sense is that there will be accelerated efforts to explore with russia what the contours of a negotiation might look like. I think there will be an effort to clarify the terms on which iran might be included although there remains very deep reluctance to moving in that direction. I think at the same time efforts to increase pressure on assad and to continue to develop the opposition will all constitute part of the diplomatic package that washington is pursuing. Woodruff meanwhile, let me put the same question to you, dmitri simes, what are the next steps as the russians see it . Youve already brought up iran. There are two different games. One is relatively easy. Not easy but relatively easy. Its how to get rid of assad. Its clear that he will go. The only question is, how are they going to arrange it . It would be better to negotiate a solution not amass on the ground. The second question, do we want to use this crisis to remove iran from syria . More broadly to remove iran at least to reduce or downsize in the region. If we want to do all that, then we would be asking russia for a very major concession. They think that putin is not quite prepared to do it at this point. The relationship remains problematic. They are difficult issues. My impression is that putin would like to accommodate obama but not at any price. If i may at the same time, i think it would be very difficult for the u. S. To accept the framework in which iran was not seen to pay a price for the spoar of the assad regime. Woodruff big Big Questions remaining here. Thank you both. Ifill protests surrounding egyptian president Mohammed Morsis recent power grab and a hastily drafted constitution turned violent again today. Jeffrey brown reports. Brown Police Outside the president ial palace in cairo retreated this evening after a crowd broke through their lines. Officers fired back with tear gas but eventually